Latest news with #chipstocks
Reuters
13 minutes ago
- Business
- Reuters
Broadcom shares drop as revenue forecast fails to impress
June 5 (Reuters) - Broadcom (AVGO.O), opens new tab shares fell nearly 4% in premarket trading on Friday, after the company's third-quarter revenue forecast failed to impress investors who have been extremely bullish on chip stocks amid an artificial intelligence boom. The Palo Alto, California-based company, which supplies semiconductors to Apple (AAPL.O), opens new tab and Samsung ( opens new tab, provides advanced networking gear that allows vast amounts of data to travel across AI data centers, making its chips crucial for the development of generative AI technology. Broadcom forecast third-quarter revenue of around $15.80 billion, compared with analysts' average estimate of $15.71 billion, according to data compiled by LSEG. "High expectations drove a bit of downside," Bernstein analyst Stacy Rasgon said in a note. Broadcom also helps design custom AI processors for large cloud providers, which compete against Nvidia's (NVDA.O), opens new tab pricey off-the-shelf chips. Global chipmakers, including Nvidia, have been vulnerable to U.S. President Donald Trump's shifting trade policy and export curbs as Washington attempts to limit Beijing's access to advanced U.S. technology. "AVGO is ramping two additional customers, but they are still small. So the processor business will grow this year, but at a measured rate," said Morgan Stanley. Last week, rival Marvell Technology (MRVL.O), opens new tab forecast second-quarter revenue above Wall Street estimate, betting on strong demand for its custom chips powering AI workload in data centers. Broadcom's valuation had crossed $1 trillion for the first time in December after it forecast massive expansion in demand for chips that power AI. Its shares have risen about 12% so far this year. It has a 12-month forward price-to-earnings ratio of 35.36, compared with Marvell's 20.63, according to data compiled by LSEG.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Stock Indexes Rebound on Strength in Chip Makers and Energy Stocks
The S&P 500 Index ($SPX) (SPY) Monday closed up +0.41%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.71%. June E-mini S&P futures (ESM25) are up +0.60%, and June E-mini Nasdaq futures (NQM25) are up +0.80%. Stock indexes on Monday recovered from early losses and settled higher. Strength in chip stocks led the broader market higher on Monday. Also, energy producers rallied after the price of WTI crude rose more than +2% to a 1-1/2 week high. In addition, US steel and aluminum producers soared Monday after President Trump pledged to double tariffs on US steel and aluminum imports to 50% from 25%. Stocks on Monday initially moved lower due to an escalation of trade tensions between the US and China. On Monday, China's Ministry of Commerce accused the US of unilaterally introducing new discriminatory restrictions, including new guidelines on AI chip export controls, curbs on chip design software sales to China, and the revocation of Chinese student visas, and vowed to take measures to defend its interests. The latest flare-up threatens to worsen trade relations even after President Trump expressed hope he will speak with Chinese President Xi Jinping this week to accelerate a trade truce. Economic concerns were also bearish for stocks after Monday's news showed US manufacturing activity last month unexpectedly contracted by the most in 6 months, and April construction spending unexpectedly declined. In addition, higher bond yields on Monday were bearish for stocks. The 10-year T-note yield Monday rose +6 bp to 4.46% as escalating trade tensions between the US and China led to a broad selloff of dollar assets, including Treasuries. Also, Monday's 2% jump in the price of WTI crude to a 1-1/2 week high has boosted inflation expectations, a hawkish factor for Fed policy. The US May ISM manufacturing index unexpectedly fell -0.2 to 48.5, weaker than expectations of an increase to 49.5 and the steepest pace of expansion in 6 months. US Apr construction spending unexpectedly fell -0.4% m/m, weaker than expectations of a +0.2% m/m increase. Fed comments on Monday were mostly supportive of stocks and bonds. Fed Governor Waller said, "Assuming that the effective tariff rate settles close to my lower tariff scenario, that underlying inflation continues to make progress to our 2% goal, and that the labor market remains solid, I would be supporting good news rate cuts later this year." Also, Chicago Fed President Goolsbee said the Fed can proceed with interest rate cuts if uncertainty around trade policy is resolved. On the negative side, Dallas Fed President Logan said the Fed can afford to be patient before acting on interest rates as "both sides of our dual mandate appear fairly balanced." The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on June 17-18. The markets this week will focus on any new trade or tariff news. On Tuesday, Apr factory orders are expected to fall -3.2% m/m and the Apr JOLTS job openings report is expected to fall by -92,000 to 7.100 million. On Wednesday, the May ADP employment change is expected to climb by +110,000, and the May ISM services index is expected to rise +0.5 to 52.1. On Thursday, weekly initial unemployment claims are expected to fall by -5,000 to 235,000. On Friday, May nonfarm payrolls are expected to climb +125,000, and the May unemployment rate is expected to remain unchanged at 4.2%. Finally, May average hourly earnings are expected to rise +0.3% m/m and +3.7% y/y. Overseas stock markets on Monday settled lower. The Euro Stoxx 50 fell to a 1-week low and closed down -0.21%. China's Shanghai Composite was closed today for the Dragon Boat Day holiday. Japan's Nikkei Stock 225 closed down -1.30%. Interest Rates September 10-year T-notes (ZNU2 5) Monday closed down -9 ticks. The 10-year T-note yield rose +6.2 bp to 4.462%. Sep T-notes on Monday were under pressure as escalating trade tensions between the US and China have led to a broad selloff of dollar assets, including Treasuries. Also, a negative carryover from weakness in European government bonds weighing on T-notes. In addition, today's 2% jump in the price of WTI crude to a 1-1/2 week high has boosted inflation expectations, a bearish factor for T-notes. Losses in T-notes were limited due to dovish Fed comments after Fed Governor Waller laid out a scenario for the Fed to cut interest rates later this year, and Chicago Fed President Goolsbee said the Fed could proceed with interest rate cuts if uncertainty around trade policy is resolved. In addition, Monday's weaker-than-expected reports on May ISM manufacturing activity and Apr construction spending were bullish for T-notes. European government bond yields on Monday finished higher. The 10-year German bund yield rose +2.4 bp to 2.524%. The 10-year UK gilt yield rose +2.1 bp to 4.667%. The German May S&P manufacturing PMI was revised downward by -0.5 to 48.3 from the previously reported 48.8. The UK May S&P manufacturing PMI was revised upward by 1.3 to 46.4 from the previously reported 45.1. Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at Thursday's policy meeting. US Stock Movers Chip stocks moved higher Monday to lend support to the overall market. Micron Technology (MU) closed up more than +4%, and Advanced Micro Devices (AMD) and Microchip Technology (MCHP) closed up more than +3%. Also, Broadcom (AVGO) and Marvel Technology (MRVL) closed up more than +2%. In addition, Nvidia (NVDA), Lam Research (LRCX), ARM Holdings Plc (ARM), and ASML Holding NV (ASML) closed up more than +1%. US steel and aluminum producers rallied Monday after President Trump said he would increase tariffs on US steel and aluminum imports to 50% from 25%. Cleveland-Cliffs (CLF) and Century Aluminum (CENX) closed up more than +20%. Also, Steel Dynamics (STLD) closed up more than +10% to lead gainers in the S&P 500. In addition, Nucor (NUE) closed up more than +10%, and Commercial Metals (CMC) closed up more than +5%. Energy producers and energy service providers moved higher on Monday as the price of WTI crude climbed more than +2% to a 1-1/2 week high. Devon Energy (DVN), Diamondback Energy (FANG), and Haliburton (HAL) closed up more than +2%. Also, APA Corp (APA), ConocoPhillips (COP), Hess Corp (HES), and Occidental Petroleum (OXY) are up more than +1%. Gold mining stocks rose Monday after the price of gold soared more than +2% to a 3-week high. Gold Fields Ltd (GFI) closed up more than +9%, and Anglogold Ashanti Plc (AU) closed up more than +7%. Also, Newmont (NEM) closed up more than +5%, and Freeport McMoRan (FCX) closed up more than +4%. Zscaler (ZS) closed up more than +6% to lead gainers in the Nasdaq 100 after UBS raised its price target on the stock to $315 from $260. Moderna (MRNA) closed up more than +1% after the FDA approved the company's new Covid vaccine for adults over 65 and anyone over 12 with at least one risk factor for severe disease. Vera Therapeutics (VERA) closed up more than +66% after reporting the primary endpoint was met in a Phase 3 trial of its atacicept for the treatment of immunoglobulin A nephropathy. Technology companies with the US government as a major client moved lower on Monday after The Wall Street Journal reported that funding cuts by the Trump administration have spread to technology contractors. As a result, Leidos Holdings (LDOS) closed down more than -4%, and CDW Corp (CDW) closed down more than -3% to lead losers in the Nasdaq 100. Also, Adobe (ADBE) and Dell Technologies (DELL) closed down more than -2%. Automakers retreated Monday as President Trump's pledge to boost tariffs on US steel and aluminum imports to 50% from 25% threatens to cut into the companies' profits. Stellantis NV (STLA), General Motors (GM), and Ford Motor (F) closed down more than -3%. Science Applications International (SAIC) closed down more than -13% after reporting Q1 EPS of $1.92, weaker than the consensus of $2.13. Centene (CNC) closed down more than -3% after Barclays downgraded the stock to equal weight from overweight, citing concern about Medicare Part D and individual Affordable Care Act businesses. Tesla (TSLA) closed down more than -1% after Tesla May new-vehicle registrations in France fell -57% y/y to an almost 3-year low. JB Hunt Transport Services (JBHT) closed down more than -1% after Goldman Sach downgraded the stock to neutral from buy. Crowdstrike Holdings Inc (CRWD), Dollar General Corp (DG), Donaldson Co Inc (DCI), Ferguson Enterprises Inc (FERG), Guidewire Software Inc (GWRE), Hewlett Packard Enterprise Co (HPE), Ollie's Bargain Outlet Holding (OLLI).
Yahoo
18-05-2025
- Business
- Yahoo
AI chips are the new ‘coin of the realm' as they grease the wheels of geopolitical negotiations, BofA says
Analysts at are bullish on chip stocks like Nvidia as mega-projects in the Middle East highlight long-term demand for AI computing. Also bolstering the case for the stocks is the emergence of AI chips as the new "coin of the realm," serving as currency in geopolitical talks. AI chips, such as the graphics processing units that are critical to Nvidia's success, have become so important globally they are like a form of currency in geopolitical talks on trade, according to analysts at Bank of America. That's as recent mega-deals point to continued demand for AI computing power. In a note on Tuesday, BofA estimated that Nvidia's and AMD's AI infrastructure projects with Humain, a subsidiary of the Saudi Arabia Public Investment Fund, would come out to $3 billion-$5 billion annually, or $15 billion-$20 billion over a multi-year period. Humain will receive 18,000 cutting-edge Blackwell chips from Nvidia, while AMD, a close rival of Nvidia in AI accelerators, signed a $10 billion collaboration with Humain to provide 500 megawatts of AI compute capacity for its data centers. Such "sovereign AI" deals could represent more than $50 billion annually in the overall $450 billion-$500 billion global AI infrastructure market opportunity globally, BofA said. "Sovereign AI could also help address limited power availability for data centers in US, plus offset headwinds from restrictions on US companies shipping to China," analysts added. Nvidia and AMD are poised to be the biggest winners from the Saudi project, according to BofA, which reiterated buy ratings on those stocks and hiked their prices targets to $160 from $150 and to $130 from $120, respectively. Chip stocks Broadcom and Marvell Technology will also benefit as will optical connectivity provider Coherent, the note said, reiterating buy ratings on those too. "Despite being more crowded we believe these vendors are exposed to the modest dependable/secular demand for AI deployments by well-funded: 1) hyperscale/cloud customers (CY25 capex now tracking +44% YoY vs. +7% YoY at same point last year), 2) Recent dissolution of restrictive AI diffusion rules, and 3) Important role played by AI chips as part of geopolitical negotiations around trade/tariffs (GPU as the new 'coin of the realm')," BofA said. Indeed, Nvidia is seen as a bargaining chip in U.S.-China trade talks as both sides seek to lower barriers while also maintaining their own technological advantages. Meanwhile, Humain's deal with Nvidia not only represents the next steps in Trump's efforts to court Mideast countries, but also elevates Nvidia's role in global AI development. The thousands of semiconductor chips Humain will receive are Nvidia's newest and most powerful, introduced only in March. While U.S. AI hyperscalers like Alphabet and Amazon will remain a priority for Nvidia, Saudi Arabia will get preferential treatment over other countries, Wedbush managing director Dan Ives told Fortune's Sasha Rogelberg this past week. 'This puts them to the front of the line,' he said. 'It's a red-carpet rollout. It's a region that ultimately could add a trillion dollars to the market opportunity for AI over the next decade.' 'With China still a tenuous situation, I think it's a watershed moment,' he added. This story was originally featured on Sign in to access your portfolio
Yahoo
18-05-2025
- Business
- Yahoo
AI chips are the new ‘coin of the realm' as they grease the wheels of geopolitical negotiations, BofA says
Analysts at are bullish on chip stocks like Nvidia as mega-projects in the Middle East highlight long-term demand for AI computing. Also bolstering the case for the stocks is the emergence of AI chips as the new "coin of the realm," serving as currency in geopolitical talks. AI chips, such as the graphics processing units that are critical to Nvidia's success, have become so important globally they are like a form of currency in geopolitical talks on trade, according to analysts at Bank of America. That's as recent mega-deals point to continued demand for AI computing power. In a note on Tuesday, BofA estimated that Nvidia's and AMD's AI infrastructure projects with Humain, a subsidiary of the Saudi Arabia Public Investment Fund, would come out to $3 billion-$5 billion annually, or $15 billion-$20 billion over a multi-year period. Humain will receive 18,000 cutting-edge Blackwell chips from Nvidia, while AMD, a close rival of Nvidia in AI accelerators, signed a $10 billion collaboration with Humain to provide 500 megawatts of AI compute capacity for its data centers. Such "sovereign AI" deals could represent more than $50 billion annually in the overall $450 billion-$500 billion global AI infrastructure market opportunity globally, BofA said. "Sovereign AI could also help address limited power availability for data centers in US, plus offset headwinds from restrictions on US companies shipping to China," analysts added. Nvidia and AMD are poised to be the biggest winners from the Saudi project, according to BofA, which reiterated buy ratings on those stocks and hiked their prices targets to $160 from $150 and to $130 from $120, respectively. Chip stocks Broadcom and Marvell Technology will also benefit as will optical connectivity provider Coherent, the note said, reiterating buy ratings on those too. "Despite being more crowded we believe these vendors are exposed to the modest dependable/secular demand for AI deployments by well-funded: 1) hyperscale/cloud customers (CY25 capex now tracking +44% YoY vs. +7% YoY at same point last year), 2) Recent dissolution of restrictive AI diffusion rules, and 3) Important role played by AI chips as part of geopolitical negotiations around trade/tariffs (GPU as the new 'coin of the realm')," BofA said. Indeed, Nvidia is seen as a bargaining chip in U.S.-China trade talks as both sides seek to lower barriers while also maintaining their own technological advantages. Meanwhile, Humain's deal with Nvidia not only represents the next steps in Trump's efforts to court Mideast countries, but also elevates Nvidia's role in global AI development. The thousands of semiconductor chips Humain will receive are Nvidia's newest and most powerful, introduced only in March. While U.S. AI hyperscalers like Alphabet and Amazon will remain a priority for Nvidia, Saudi Arabia will get preferential treatment over other countries, Wedbush managing director Dan Ives told Fortune's Sasha Rogelberg this past week. 'This puts them to the front of the line,' he said. 'It's a red-carpet rollout. It's a region that ultimately could add a trillion dollars to the market opportunity for AI over the next decade.' 'With China still a tenuous situation, I think it's a watershed moment,' he added. This story was originally featured on
